GM Expects Saturn to Drive North American Growth for the Next 5 Years

Retailers who attended this year's National Automobile Dealers Association (NADA) meeting in San Francisco, received a reassuring, but challenging message from company executives: GM expects its growth in North America over the next five years to come from Saturn.

GM fears that sales of its large truck-based sport-utilities may drop as a result of rising fuel costs. Instead the company wants smaller, more fuel efficient models from Saturn to more than make up the difference. "Their sales plan is they're saying there will be a slight increase in overall sales via a shift from full-sized trucks to cars and small SUVs," John Pitre, general manager of Saturn of Bakersfield in California told Automotive News. The boost in sales will be fueled by Saturn's mainstream Aura, Vue, and Outlook models. The new compact European Astra hatchbacks that are just arriving at retailer stores should help push sales even higher.

Saturn sales were up 12.1% in January, and the brand's overall retail sales increased 12% in 2007. The company hopes to build on that success in 2008. "We've got momentum on our side," Saturn general manager Jill Lajdziak told retailers.

To help continue to drive growth, Automotive News said Saturn plans to:

  • Continue to build sales momentum and volume
  • Increase retailer profitability with "higher average transaction prices"
  • Focus on hybrid and eco-friendly green technology

Selling Saturn vehicles is once again becoming a lucrative business for owners. In the early to mid part of the decade, deep discounts and incentives significantly decreased retailer margins, forcing more than a few stores to close their doors over the past several years. Last year Saturn's new, larger, more sophisticated revitalized lineup marked a turning point. "The average transaction price was up by $7,000 in 2007 compared with 2006," Automotive News reported. "Retailer profitability grew by 24% last year compared with 2006.

That additional profits will help Saturn store owners fund much need facility makeovers all around the country. Pitre told the trade publication that his "store remodel will be done in July, so that's a sign that we're very bullish on the brand."

Source: Automotive News

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